For the first quarter according to Bank Negara (Malaysian central bank for you non-Malaysians), Malaysian gross domestic product has grown for 7.6%. That is quite high and it definitely reminds me of the days during the Asian boom when Malaysia and a few others Southeast Asian countries earned the Asian tigers nick. Back in those days, Malaysia had consistently grown for more than 7.0% annually.
But of course, this is nothing compared to China, which is growing at almost 10%. Then again, China has only recently started to develop its economy. In contrast, I have read a report somewhere that states a country in Africa has a growth rate of about 70% – my guess, there is not even a toilet bowl there.
Forget about the toilet and let us concentrate on a few things that caught my eyes. Actually there are only two things. First:
The underlying fundamentals will continue to accord flexibility for monetary policy to support stronger economic activities, without creating inflationary pressures.
What flexibility? The Ringgit is pegged to the Dollar! Bank Negara is obliged to buy or sell the US Dollar in order to keep the exchange rate fixed at a certain rate. There is little room for maneuvering when it comes to monetary policy.
Secondly:
Interest rates can remain low for some time to come to support the growth momentum.
That sounds totally like Alan Greenspan. I am starting to wonder if all central bankers speak the same language.
